DAMASCUS, Ark.—Organic dairy farmers in Arkansas are still feeling the effects of a May 2 tornado that destroyed the state’s only organic feed mill.

The Caldwell Milling Co. served nine organic dairies before the storm. Owner Harry Caldwell said he won’t rebuild. He has been helping import organic grain from other states for his customers. But without the mill, he does not have the storage capacity he needs and the orders have to ship straight to the dairies.

Dairy farmers say the higher cost for feed has sapped the profit out of their operations.

Mike Fisher, a farmer who converted his dairy to organic two years ago, said he is paying about $545 a ton for organic feed. Add to that a per-ton fee of $56 to import the grain from Kansas, and Fisher said he is paying twice as much for feed as he did a year ago.

“It’s just basically a break-even proposition right now. What we are hoping is that the prices will come down some,” Fisher said.

Caldwell said he is still trying to work out what he will do next.

“There’s not enough volume of the organic feed to justify rebuilding it (the Damascus mill) as a stand-alone operation,” Caldwell said.

He said it’s possible that he may convert a facility he has at Rose Bud for organic feed. But Caldwell said he would have to move production of other feeds to a larger line and his current volume doesn’t justify the change.

Fisher and other dairy producers have signed multiyear contracts with organic milk distributors out of state. That locks them into a price for their product, so they can’t pass on the higher feed costs until the contracts expire.

Jim McCartney, an organic dairyman in Franklin County, said fuel costs are making it harder to import feed from out of state. He recently shared costs with Fisher to buy a truckload of feed from Sek See Clean Inc. in Thayer, Kan.

“This fuel situation is getting to the point where trucking it in is not only costly to us, but costly to the conventional (dairy) people, too,” McCartney said.

The number of dairies in Arkansas has dropped in recent years, largely because of a rise in feed costs and low wholesale milk prices. The price of milk has increased, but the cost of diesel fuel and corn also went substantially higher.

Fisher said he’ll spend about $200,000 this year on cattle feed, with $4,000 for fuel. Though organic corn sells for more than conventional corn, changes in its price tend to track conventional corn, buyers said.

“The organic dairy business and the organic chicken business are in a real tight squeeze right now because the cost of organic feed is so high,” said Britton White, manager of Sek See Clean. “If we can get through this, I think we will be in pretty good shape.”